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Rents in Megacities Can't Go Up Forever

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Re: Rents in Megacities Can't Go Up Forever

#11

Post by xienze »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

> Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places.

Startups are built on young talent. Young people are obsessed with living in "the big city" and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable.

So if you want young talent, you better set up shop in SF.

Re: Rents in Megacities Can't Go Up Forever

#12

Post by Finnucane »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

You might have to think twice about Berlin:

https://www.nytimes.com/2017/03/18/world/europe/berlin-rent-...

Re: Rents in Megacities Can't Go Up Forever

#13

Post by eli_gottlieb »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

>Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines?

Because the real commodity being sold with the apartments and offices isn't net access or even land. It's proximity to rich people. It's not an open market economy; it's a feudal system in which you need to stick close to your patrons.

Re: Rents in Megacities Can't Go Up Forever

#14

Post by maccard »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

I wouldn't have any interest in living in many of those cities you listed, and as a result wouldn't be willing to move and work there. I'm sure there are many out there who feel the same.

Re: Rents in Megacities Can't Go Up Forever

#15

Post by eli_gottlieb »

xienze wrote: post #11
geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

> Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. Startups are built on young talent. Young people are obsessed with living in "the big city" and to hear them tell it, living in a suburb and driving a car is about the worst thing imaginable. So if you want young talent, you better set up shop in SF.

That's a bit silly to say, considering SF and SV are about as suburbanized as can be. If you wanted "the big city", you'd go to New York, London, Paris, Tokyo, or some other place with actual urban density.

Re: Rents in Megacities Can't Go Up Forever

#16

Post by geff82 »

rco8786 wrote: post #9
geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

Technology has a long way to go before it completely disrupts human evolution and the desire to be close to people with similar values.

You are right. But still I don't quite understand why there are not more smaller dynamic centers popping up. Of course it is NOT only SV and NYC any more. But there would be many other places that are nice enough to attract IT in a substantial way.

Re: Rents in Megacities Can't Go Up Forever

#17

Post by sparkling »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

I think more than anything else, this problem is caused by a old mindset. Some managers really believe that "if he ain't in the office, he ain't working". Especially when working with external consultants, even if that means paying them to commute a total of 5+ hours daily.

Re: Rents in Megacities Can't Go Up Forever

#18

Post by amyjess »

geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

> Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines?

I agree in general, and I think it's likely that the future of growth is in sprawling inland metro areas like Dallas-Fort Worth, Kansas City-Overland Park, and Minneapolis-St. Paul.

Well, in the case of Dallas, this is largely going to depend on whether or not the Texas state legislature can ever get their heads out of their asses. If SB6 passes, expect Texas's economy to crater.

On the other hand, I'm not sure if your exact list of cities is feasible. Amarillo is too small to really become a hub for anything in the near future (it would take a dedicated effort, like how Bugsy Siegel transformed Las Vegas). And Miami is limited in its ability to sprawl because it's on a coast. Des Moines is a distinct possibility, though.

The suburbs have room to sprawl out forever. The city centers can become high-rent places for the rich, and everyone else can live in the suburbs and exurbs. Furthermore, the inner ring suburbs can become "edge cities" where businesses prefer to locate themselves (this is already how Dallas is laid out) so people from both the exurbs and the city center can have short commutes.

Re: Rents in Megacities Can't Go Up Forever

#19

Post by amyjess »

bpicolo wrote: post #8
geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

You could always do what the founders of TI did: start your own university and grow your own talent.

The University of Texas at Dallas, established explicitly for this reason, is probably the reason why Dallas is a tech hub.

Re: Rents in Megacities Can't Go Up Forever

#20

Post by [deleted] »

bpicolo wrote: post #8
geff82 wrote: post #4

Especially for information technology, I don't understand the rationale why it has to be concentrated at certain places. As long as there is a good net connection, it could be anywhere in the world. Let's concentrate on the US for a moment. Why can't a successful startup not be in Dallas, Amarillo, Miami or Des Moines? Talented people already move from one coast to the other, so they could as well move to any other p…

There are certainly a lot of factors. People want to live in trendy cities. There's a lot to consider besides rent - culture, nightlife, etc. San Francisco sure does have some of the best food in the country (and with tech consuming most of spare time the way it is, eating out is really a huge part of culture). Rent definitely ends up being the deal breaker for many, but for others isn't. It's a lot harder for a comp…

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